How Much Did Diatreme Resources' (ASX:DRX) CEO Pocket Last Year?

Neil McIntyre became the CEO of Diatreme Resources Limited (ASX:DRX) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Diatreme Resources.

View our latest analysis for Diatreme Resources

Comparing Diatreme Resources Limited's CEO Compensation With the industry

Our data indicates that Diatreme Resources Limited has a market capitalization of AU$46m, and total annual CEO compensation was reported as AU$326k for the year to December 2019. We note that's an increase of 35% above last year. In particular, the salary of AU$240.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$269m, we found that the median total CEO compensation was AU$312k. This suggests that Diatreme Resources remunerates its CEO largely in line with the industry average. Moreover, Neil McIntyre also holds AU$128k worth of Diatreme Resources stock directly under their own name.

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Although there is a difference in how total compensation is set, Diatreme Resources more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Diatreme Resources Limited's Growth

Diatreme Resources Limited has seen its earnings per share (EPS) increase by 26% a year over the past three years. In the last year, its revenue is up 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Diatreme Resources Limited Been A Good Investment?

Diatreme Resources Limited has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As previously discussed, Neil is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for Diatreme Resources (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Diatreme Resources, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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